Reduced Central Provident Fund contribution rates for older workers, which get lower after age 50, will stay in order not to disadvantage these workers in the competition for jobs.

'If we were to raise the CPF now or restore the CPF for older workers, it may adversely affect the competitiveness of the workers and the competitiveness of companies,' Manpower Minister Gan Kim Yong said.

He was responding to calls by consultants to review lower contribution rates - introduced in 2005 - as workers needed to build up retirement nest eggs.

He said the key to boosting re-employment of older workers was through flexibility in the design of jobs and pay structure. Adjusting CPF rates would be counterproductive as it would create more rigidity.

Employment of older workers rose after firms moved from a seniority-based wage system to one based on job scope and performance. Last year, 57 per cent of resident workers between 55 and 64 were employed - up from 45 per cent in 2003.

This article was first published in The Straits Times.